Charlotte Russe (NASDAQ:CHIC) is a retail stock I've been following this year that has been particularly beaten up by investors. The stock's surge yesterday gives one reason to wonder if this company is beginning to right itself.  

Nobody thought Charlotte Russe's fourth quarter was going to be spectacular; the company had reported that expectation earlier this year. Charlotte Russe's fourth-quarter net income decreased 65% to $8.4 million, or $0.33 per share. Sales increased a smidge (about 1%) to $190.3 million, and comps decreased 5.3%, compared to a 7.4% increase this time last year.

Of course, the current difficult conditions and slow consumer spending probably led many to believe this retailer would perform far worse. Other companies have shared disappointing tidings as well; even hot retailers like Zumiez (NASDAQ:ZUMZ) haven't had much good to say about the next couple of months.

Charlotte Russe is also being conservative about the first quarter, and even though it saw the beginnings of some promising sales trends (comps are positive quarter to date), it's advising investors to expect a flat to low-single-digit decline in comps with earnings of $0.47 per share to $0.50 per share, a decrease from last year's first quarter. The company said it remains cautious given "the uncertain economic environment" that many retailers have cited.

I've long thought Charlotte Russe looked like an inexpensive stock idea. Unlike companies like Gap (NYSE:GPS), Talbots (NYSE:TLB), and now even Chico's (NYSE:CHS), it hasn't grappled with turnaround issues for that long. The value-priced, fast-fashion, youth-oriented niche Charlotte Russe occupies, along with retailers like Forever 21 and H&M (OTC BB: HMRZF.PK), is a good niche to be in at the moment.

Even with yesterday's significant jump in price (it increased about 7%), Charlotte Russe still looks attractively valued. Shares have fallen 48% over the last 12 months, and it's trading at just 8 times trailing earnings, a significant discount to the rest of the specialty retail space, which trades at 17 times earnings.

Better yet, Charlotte Russe's PEG ratio is sitting at a mere 0.53. The uncertain consumer environment will likely ensure difficult times for many retailers in the short term, but Charlotte Russe still looks cheap for investors with a long time horizon.

More chic Foolishness:

  • Last year, we got to know Charlotte Russe better.
  • The beginning of this year was chic.
  • Its falling stock price has made this company cheap chic.

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Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.